103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3675

 

Introduced 2/9/2024, by Sen. Napoleon Harris, III

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Illinois Insurance Code. Provides that any failure to make a disclosure or obtain a signed confirmation required under specified provisions of the Short-Term, Limited-Duration Health Insurance Coverage Act is an unfair method of competition and an unfair and deceptive act or practice in the business of insurance. Provides that the Director of Insurance shall have the power to examine and investigate into the affairs of every person subject to specified provisions of the Short-Term, Limited-Duration Health Insurance Coverage Act. Provides that the Director may place on probation, suspend, revoke, or refuse to issue or renew an insurance producer's license or may levy a civil penalty or take any combination of actions for any failure to make a disclosure or obtain a signed confirmation required or any unlawful practice described under specified provisions of the Short-Term, Limited-Duration Health Insurance Coverage Act. Amends the Short-Term, Limited-Duration Health Insurance Coverage Act. Sets forth provisions concerning the purpose and scope of the Act. Provides that the Act applies to health insurance issuers that offer short-term, limited-duration health insurance coverage to groups and individuals (rather than only individuals) in the State. Sets forth provisions concerning duration of coverage; cancellation; and disclosure, filing, and coverage requirements of short term, limited-duration health insurance coverage. Sets forth provisions concerning unfair or deceptive practices relating to the sale of supplemental or short-term, limited-duration health insurance coverage. Defines terms. Makes other changes. Effective January 1, 2026.


LRB103 38256 RPS 68391 b

 

 

A BILL FOR

 

SB3675LRB103 38256 RPS 68391 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing Sections 121-2.05, 356z.18, 367.3, 367a, 368f, 424,
6425, and 500-70 as follows:
 
7    (215 ILCS 5/121-2.05)  (from Ch. 73, par. 733-2.05)
8    Sec. 121-2.05. Group insurance policies issued and
9delivered in other State-Transactions in this State. With the
10exception of insurance transactions authorized under Sections
11230.2 or 367.3 of this Code and transactions subject to the
12requirements of the Short-Term, Limited-Duration Health
13Insurance Coverage Act, transactions in this State involving
14group legal, group life and group accident and health or
15blanket accident and health insurance or group annuities where
16the master policy of such groups was lawfully issued and
17delivered in, and under the laws of, a State in which the
18insurer was authorized to do an insurance business, to a group
19properly established pursuant to law or regulation, and where
20the policyholder is domiciled or otherwise has a bona fide
21situs.
22(Source: P.A. 86-753.)
 

 

 

SB3675- 2 -LRB103 38256 RPS 68391 b

1    (215 ILCS 5/356z.18)
2    (Text of Section before amendment by P.A. 103-512)
3    Sec. 356z.18. Prosthetic and customized orthotic devices.
4    (a) For the purposes of this Section:
5    "Customized orthotic device" means a supportive device for
6the body or a part of the body, the head, neck, or extremities,
7and includes the replacement or repair of the device based on
8the patient's physical condition as medically necessary,
9excluding foot orthotics defined as an in-shoe device designed
10to support the structural components of the foot during
11weight-bearing activities.
12    "Licensed provider" means a prosthetist, orthotist, or
13pedorthist licensed to practice in this State.
14    "Prosthetic device" means an artificial device to replace,
15in whole or in part, an arm or leg and includes accessories
16essential to the effective use of the device and the
17replacement or repair of the device based on the patient's
18physical condition as medically necessary.
19    (b) This amendatory Act of the 96th General Assembly shall
20provide benefits to any person covered thereunder for expenses
21incurred in obtaining a prosthetic or custom orthotic device
22from any Illinois licensed prosthetist, licensed orthotist, or
23licensed pedorthist as required under the Orthotics,
24Prosthetics, and Pedorthics Practice Act.
25    (c) A group or individual major medical policy of accident
26or health insurance or managed care plan or medical, health,

 

 

SB3675- 3 -LRB103 38256 RPS 68391 b

1or hospital service corporation contract that provides
2coverage for prosthetic or custom orthotic care and is
3amended, delivered, issued, or renewed 6 months after the
4effective date of this amendatory Act of the 96th General
5Assembly must provide coverage for prosthetic and orthotic
6devices in accordance with this subsection (c). The coverage
7required under this Section shall be subject to the other
8general exclusions, limitations, and financial requirements of
9the policy, including coordination of benefits, participating
10provider requirements, utilization review of health care
11services, including review of medical necessity, case
12management, and experimental and investigational treatments,
13and other managed care provisions under terms and conditions
14that are no less favorable than the terms and conditions that
15apply to substantially all medical and surgical benefits
16provided under the plan or coverage.
17    (d) The policy or plan or contract may require prior
18authorization for the prosthetic or orthotic devices in the
19same manner that prior authorization is required for any other
20covered benefit.
21    (e) Repairs and replacements of prosthetic and orthotic
22devices are also covered, subject to the co-payments and
23deductibles, unless necessitated by misuse or loss.
24    (f) A policy or plan or contract may require that, if
25coverage is provided through a managed care plan, the benefits
26mandated pursuant to this Section shall be covered benefits

 

 

SB3675- 4 -LRB103 38256 RPS 68391 b

1only if the prosthetic or orthotic devices are provided by a
2licensed provider employed by a provider service who contracts
3with or is designated by the carrier, to the extent that the
4carrier provides in-network and out-of-network service, the
5coverage for the prosthetic or orthotic device shall be
6offered no less extensively.
7    (g) The policy or plan or contract shall also meet
8adequacy requirements as established by the Health Care
9Reimbursement Reform Act of 1985 of the Illinois Insurance
10Code.
11    (h) This Section shall not apply to accident only,
12specified disease, short-term travel hospital or medical,
13hospital confinement indemnity or other fixed indemnity,
14credit, dental, vision, Medicare supplement, long-term care,
15basic hospital and medical-surgical expense coverage,
16disability income insurance coverage, coverage issued as a
17supplement to liability insurance, workers' compensation
18insurance, or automobile medical payment insurance.
19(Source: P.A. 96-833, eff. 6-1-10.)
 
20    (Text of Section after amendment by P.A. 103-512)
21    Sec. 356z.18. Prosthetic and customized orthotic devices.
22    (a) For the purposes of this Section:
23    "Customized orthotic device" means a supportive device for
24the body or a part of the body, the head, neck, or extremities,
25and includes the replacement or repair of the device based on

 

 

SB3675- 5 -LRB103 38256 RPS 68391 b

1the patient's physical condition as medically necessary,
2excluding foot orthotics defined as an in-shoe device designed
3to support the structural components of the foot during
4weight-bearing activities.
5    "Licensed provider" means a prosthetist, orthotist, or
6pedorthist licensed to practice in this State.
7    "Prosthetic device" means an artificial device to replace,
8in whole or in part, an arm or leg and includes accessories
9essential to the effective use of the device and the
10replacement or repair of the device based on the patient's
11physical condition as medically necessary.
12    (b) This amendatory Act of the 96th General Assembly shall
13provide benefits to any person covered thereunder for expenses
14incurred in obtaining a prosthetic or custom orthotic device
15from any Illinois licensed prosthetist, licensed orthotist, or
16licensed pedorthist as required under the Orthotics,
17Prosthetics, and Pedorthics Practice Act.
18    (c) A group or individual major medical policy of accident
19or health insurance or managed care plan or medical, health,
20or hospital service corporation contract that provides
21coverage for prosthetic or custom orthotic care and is
22amended, delivered, issued, or renewed 6 months after the
23effective date of this amendatory Act of the 96th General
24Assembly must provide coverage for prosthetic and orthotic
25devices in accordance with this subsection (c). The coverage
26required under this Section shall be subject to the other

 

 

SB3675- 6 -LRB103 38256 RPS 68391 b

1general exclusions, limitations, and financial requirements of
2the policy, including coordination of benefits, participating
3provider requirements, utilization review of health care
4services, including review of medical necessity, case
5management, and experimental and investigational treatments,
6and other managed care provisions under terms and conditions
7that are no less favorable than the terms and conditions that
8apply to substantially all medical and surgical benefits
9provided under the plan or coverage.
10    (d) With respect to an enrollee at any age, in addition to
11coverage of a prosthetic or custom orthotic device required by
12this Section, benefits shall be provided for a prosthetic or
13custom orthotic device determined by the enrollee's provider
14to be the most appropriate model that is medically necessary
15for the enrollee to perform physical activities, as
16applicable, such as running, biking, swimming, and lifting
17weights, and to maximize the enrollee's whole body health and
18strengthen the lower and upper limb function.
19    (e) The requirements of this Section do not constitute an
20addition to this State's essential health benefits that
21requires defrayal of costs by this State pursuant to 42 U.S.C.
2218031(d)(3)(B).
23    (f) The policy or plan or contract may require prior
24authorization for the prosthetic or orthotic devices in the
25same manner that prior authorization is required for any other
26covered benefit.

 

 

SB3675- 7 -LRB103 38256 RPS 68391 b

1    (g) Repairs and replacements of prosthetic and orthotic
2devices are also covered, subject to the co-payments and
3deductibles, unless necessitated by misuse or loss.
4    (h) A policy or plan or contract may require that, if
5coverage is provided through a managed care plan, the benefits
6mandated pursuant to this Section shall be covered benefits
7only if the prosthetic or orthotic devices are provided by a
8licensed provider employed by a provider service who contracts
9with or is designated by the carrier, to the extent that the
10carrier provides in-network and out-of-network service, the
11coverage for the prosthetic or orthotic device shall be
12offered no less extensively.
13    (i) The policy or plan or contract shall also meet
14adequacy requirements as established by the Health Care
15Reimbursement Reform Act of 1985 of the Illinois Insurance
16Code.
17    (j) This Section shall not apply to accident only,
18specified disease, short-term travel hospital or medical,
19hospital confinement indemnity or other fixed indemnity,
20credit, dental, vision, Medicare supplement, long-term care,
21basic hospital and medical-surgical expense coverage,
22disability income insurance coverage, coverage issued as a
23supplement to liability insurance, workers' compensation
24insurance, or automobile medical payment insurance.
25(Source: P.A. 103-512, eff. 1-1-25.)
 

 

 

SB3675- 8 -LRB103 38256 RPS 68391 b

1    (215 ILCS 5/367.3)  (from Ch. 73, par. 979.3)
2    Sec. 367.3. Group accident and health insurance;
3discretionary groups.
4    (a) No group health insurance offered to a resident of
5this State under a policy issued to a group, other than one
6specifically described in Section 367(1), shall be delivered
7or issued for delivery in this State unless the Director
8determines that:
9        (1) the issuance of the policy is not contrary to the
10    public interest;
11        (2) the issuance of the policy will result in
12    economies of acquisition and administration; and
13        (3) the benefits under the policy are reasonable in
14    relation to the premium charged.
15    (b) No such group health insurance may be offered in this
16State under a policy issued in another state unless this State
17or the state in which the group policy is issued has made a
18determination that the requirements of subsection (a) have
19been met.
20    Where insurance is to be offered in this State under a
21policy described in this subsection, the insurer shall file
22for informational review purposes:
23        (1) a copy of the group master contract;
24        (2) a copy of the statute authorizing the issuance of
25    the group policy in the state of situs, which statute has
26    the same or similar requirements as this State, or in the

 

 

SB3675- 9 -LRB103 38256 RPS 68391 b

1    absence of such statute, a certification by an officer of
2    the company that the policy meets the Illinois minimum
3    standards required for individual accident and health
4    policies under authority of Section 401 of this Code, as
5    now or hereafter amended, as promulgated by rule at 50
6    Illinois Administrative Code, Ch. I, Sec. 2007, et seq.,
7    as now or hereafter amended, or under the Short-Term,
8    Limited-Duration Health Insurance Coverage Act and rules
9    thereunder, as applicable, or by a successor rule;
10        (3) evidence of approval by the state of situs of the
11    group master policy; and
12        (4) copies of all supportive material furnished to the
13    state of situs to satisfy the criteria for approval.
14    (c) The Director may, at any time after receipt of the
15information required under subsection (b) and after finding
16that the standards of subsection (a) have not been met, order
17the insurer to cease the issuance or marketing of that
18coverage in this State.
19    (d) Notwithstanding subsections (a) and (b), group Group
20accident and health insurance subject to the provisions of
21this Section is also subject to the provisions of Section 367i
22of this Code or the Short-Term, Limited-Duration Health
23Insurance Coverage Act, as applicable, and rules thereunder
24that pertain to group accident and health insurance.
25(Source: P.A. 90-655, eff. 7-30-98.)
 

 

 

SB3675- 10 -LRB103 38256 RPS 68391 b

1    (215 ILCS 5/367a)  (from Ch. 73, par. 979a)
2    Sec. 367a. Blanket accident and health insurance.
3    (1) Blanket accident and health insurance is that form of
4accident and health insurance covering special groups of
5persons as enumerated in one of the following paragraphs (a)
6to (g), inclusive:
7    (a) Under a policy or contract issued to any carrier for
8hire, which shall be deemed the policyholder, covering a group
9defined as all persons who may become passengers on such
10carrier.
11    (b) Under a policy or contract issued to an employer, who
12shall be deemed the policyholder, covering all employees or
13any group of employees defined by reference to exceptional
14hazards incident to such employment.
15    (c) Under a policy or contract issued to a college,
16school, or other institution of learning or to the head or
17principal thereof, who or which shall be deemed the
18policyholder, covering students or teachers. However, except
19where inconsistent with 45 CFR 147.145, student health
20insurance coverage other than excepted benefits or short-term,
21limited-duration health insurance coverage that is provided
22pursuant to a written agreement with an institution of higher
23education for the benefit of its enrolled students and their
24dependents shall remain subject to the standards and
25requirements for individual health insurance coverage.
26    (d) Under a policy or contract issued in the name of any

 

 

SB3675- 11 -LRB103 38256 RPS 68391 b

1volunteer fire department, first aid, or other such volunteer
2group, which shall be deemed the policyholder, covering all of
3the members of such department or group.
4    (e) Under a policy or contract issued to a creditor, who
5shall be deemed the policyholder, to insure debtors of the
6creditors; Provided, however, that in the case of a loan which
7is subject to the Small Loans Act, no insurance premium or
8other cost shall be directly or indirectly charged or assessed
9against, or collected or received from the borrower.
10    (f) Under a policy or contract issued to a sports team or
11to a camp, which team or camp sponsor shall be deemed the
12policyholder, covering members or campers.
13    (g) Under a policy or contract issued to any other
14substantially similar group which, in the discretion of the
15Director, may be subject to the issuance of a blanket accident
16and health policy or contract.
17    (2) Any insurance company authorized to write accident and
18health insurance in this state shall have the power to issue
19blanket accident and health insurance. No such blanket policy
20may be issued or delivered in this State unless a copy of the
21form thereof shall have been filed in accordance with Section
22355, and it contains in substance such of those provisions
23contained in Sections 357.1 through 357.30 as may be
24applicable to blanket accident and health insurance and the
25following provisions:
26    (a) A provision that the policy and the application shall

 

 

SB3675- 12 -LRB103 38256 RPS 68391 b

1constitute the entire contract between the parties, and that
2all statements made by the policyholder shall, in absence of
3fraud, be deemed representations and not warranties, and that
4no such statements shall be used in defense to a claim under
5the policy, unless it is contained in a written application.
6    (b) A provision that to the group or class thereof
7originally insured shall be added from time to time all new
8persons or individuals eligible for coverage.
9    (3) An individual application shall not be required from a
10person covered under a blanket accident or health policy or
11contract, nor shall it be necessary for the insurer to furnish
12each person a certificate.
13    (4) All benefits under any blanket accident and health
14policy shall be payable to the person insured, or to his
15designated beneficiary or beneficiaries, or to his or her
16estate, except that if the person insured be a minor or person
17under legal disability, such benefits may be made payable to
18his or her parent, guardian, or other person actually
19supporting him or her. Provided further, however, that the
20policy may provide that all or any portion of any indemnities
21provided by any such policy on account of hospital, nursing,
22medical or surgical services may, at the insurer's option, be
23paid directly to the hospital or person rendering such
24services; but the policy may not require that the service be
25rendered by a particular hospital or person. Payment so made
26shall discharge the insurer's obligation with respect to the

 

 

SB3675- 13 -LRB103 38256 RPS 68391 b

1amount of insurance so paid.
2    (5) Nothing contained in this section shall be deemed to
3affect the legal liability of policyholders for the death of
4or injury to, any such member of such group.
5(Source: P.A. 83-1362.)
 
6    (215 ILCS 5/368f)
7    Sec. 368f. Military service member insurance
8reinstatement.
9    (a) No Illinois resident activated for military service
10and no spouse or dependent of the resident who becomes
11eligible for a federal government-sponsored health insurance
12program, including the TriCare program providing coverage for
13civilian dependents of military personnel, as a result of the
14activation shall be denied reinstatement into the same
15individual health insurance coverage with the health insurer
16that the resident lapsed as a result of activation or becoming
17covered by the federal government-sponsored health insurance
18program. The resident shall have the right to reinstatement in
19the same individual health insurance coverage without medical
20underwriting, subject to payment of the current premium
21charged to other persons of the same age and gender that are
22covered under the same individual health coverage. Except in
23the case of birth or adoption that occurs during the period of
24activation, reinstatement must be into the same coverage type
25as the resident held prior to lapsing the individual health

 

 

SB3675- 14 -LRB103 38256 RPS 68391 b

1insurance coverage and at the same or, at the option of the
2resident, higher deductible level. The reinstatement rights
3provided under this subsection (a) are not available to a
4resident or dependents if the activated person is discharged
5from the military under other than honorable conditions.
6    (b) The health insurer with which the reinstatement is
7being requested must receive a request for reinstatement no
8later than 63 days following the later of (i) deactivation or
9(ii) loss of coverage under the federal government-sponsored
10health insurance program. The health insurer may request proof
11of loss of coverage and the timing of the loss of coverage of
12the government-sponsored coverage in order to determine
13eligibility for reinstatement into the individual coverage.
14The effective date of the reinstatement of individual health
15coverage shall be the first of the month following receipt of
16the notice requesting reinstatement.
17    (c) All insurers must provide written notice to the
18policyholder of individual health coverage of the rights
19described in subsection (a) of this Section. In lieu of the
20inclusion of the notice in the individual health insurance
21policy, an insurance company may satisfy the notification
22requirement by providing a single written notice:
23        (1) in conjunction with the enrollment process for a
24    policyholder initially enrolling in the individual
25    coverage on or after the effective date of this amendatory
26    Act of the 94th General Assembly; or

 

 

SB3675- 15 -LRB103 38256 RPS 68391 b

1        (2) by mailing written notice to policyholders whose
2    coverage was effective prior to the effective date of this
3    amendatory Act of the 94th General Assembly no later than
4    90 days following the effective date of this amendatory
5    Act of the 94th General Assembly.
6    (d) The provisions of subsection (a) of this Section do
7not apply to any policy or certificate providing coverage for
8any specified disease, specified accident or accident-only
9coverage, credit, dental, disability income, hospital
10indemnity or other fixed indemnity, long-term care, Medicare
11supplement, vision care, or short-term travel nonrenewable
12health policy or other limited-benefit supplemental insurance,
13or any coverage issued as a supplement to any liability
14insurance, workers' compensation or similar insurance, or any
15insurance under which benefits are payable with or without
16regard to fault, whether written on a group, blanket, or
17individual basis.
18    (e) Nothing in this Section shall require an insurer to
19reinstate the resident if the insurer requires residency in an
20enrollment area and those residency requirements are not met
21after deactivation or loss of coverage under the
22government-sponsored health insurance program.
23    (f) All terms, conditions, and limitations of the
24individual coverage into which reinstatement is made apply
25equally to all insureds enrolled in the coverage.
26    (g) The Secretary may adopt rules as may be necessary to

 

 

SB3675- 16 -LRB103 38256 RPS 68391 b

1carry out the provisions of this Section.
2(Source: P.A. 94-1037, eff. 7-20-06.)
 
3    (215 ILCS 5/424)  (from Ch. 73, par. 1031)
4    Sec. 424. Unfair methods of competition and unfair or
5deceptive acts or practices defined. The following are hereby
6defined as unfair methods of competition and unfair and
7deceptive acts or practices in the business of insurance:
8        (1) The commission by any person of any one or more of
9    the acts defined or prohibited by Sections 134, 143.24c,
10    147, 148, 149, 151, 155.22, 155.22a, 155.42, 236, 237,
11    364, 469, and 513b1 of this Code.
12        (2) Entering into any agreement to commit, or by any
13    concerted action committing, any act of boycott, coercion
14    or intimidation resulting in or tending to result in
15    unreasonable restraint of, or monopoly in, the business of
16    insurance.
17        (3) Making or permitting, in the case of insurance of
18    the types enumerated in Classes 1, 2, and 3 of Section 4,
19    any unfair discrimination between individuals or risks of
20    the same class or of essentially the same hazard and
21    expense element because of the race, color, religion, or
22    national origin of such insurance risks or applicants. The
23    application of this Article to the types of insurance
24    enumerated in Class 1 of Section 4 shall in no way limit,
25    reduce, or impair the protections and remedies already

 

 

SB3675- 17 -LRB103 38256 RPS 68391 b

1    provided for by Sections 236 and 364 of this Code or any
2    other provision of this Code.
3        (4) Engaging in any of the acts or practices defined
4    in or prohibited by Sections 154.5 through 154.8 of this
5    Code.
6        (5) Making or charging any rate for insurance against
7    losses arising from the use or ownership of a motor
8    vehicle which requires a higher premium of any person by
9    reason of his physical disability, race, color, religion,
10    or national origin.
11        (6) Failing to meet any requirement of the Unclaimed
12    Life Insurance Benefits Act with such frequency as to
13    constitute a general business practice.
14        (7) Failing to make a disclosure or obtain a signed
15    confirmation required under Section 15 of the Short-Term,
16    Limited-Duration Health Insurance Coverage Act or any
17    unlawful practice described in Section 30 of the
18    Short-Term, Limited-Duration Health Insurance Coverage
19    Act.
20(Source: P.A. 102-778, eff. 7-1-22.)
 
21    (215 ILCS 5/425)  (from Ch. 73, par. 1032)
22    Sec. 425. Power of Director.
23    The Director shall have power to examine and investigate
24into the affairs of every person engaged in the business of
25insurance in this State, or otherwise subject to the

 

 

SB3675- 18 -LRB103 38256 RPS 68391 b

1provisions of Section 30 of the Short-Term, Limited-Duration
2Health Insurance Coverage Act, and to examine and investigate
3into the affairs of any person domiciled in or resident of this
4State engaged in the business of insurance in any other State,
5Territory, Province, Possession, Country or District in which
6he is not licensed or otherwise authorized to transact
7business in order to determine whether such person has been or
8is engaged in any unfair method of competition or in any unfair
9or deceptive act or practice prohibited by Section 424.
10(Source: Laws 1967, p. 990.)
 
11    (215 ILCS 5/500-70)
12    (Section scheduled to be repealed on January 1, 2027)
13    Sec. 500-70. License denial, nonrenewal, or revocation.
14    (a) The Director may place on probation, suspend, revoke,
15or refuse to issue or renew an insurance producer's license or
16may levy a civil penalty in accordance with this Section or
17take any combination of actions, for any one or more of the
18following causes:
19        (1) providing incorrect, misleading, incomplete, or
20    materially untrue information in the license application;
21        (2) violating any insurance laws, or violating any
22    rule, subpoena, or order of the Director or of another
23    state's insurance commissioner;
24        (3) obtaining or attempting to obtain a license
25    through misrepresentation or fraud;

 

 

SB3675- 19 -LRB103 38256 RPS 68391 b

1        (4) improperly withholding, misappropriating or
2    converting any moneys or properties received in the course
3    of doing insurance business;
4        (5) intentionally misrepresenting the terms of an
5    actual or proposed insurance contract or application for
6    insurance;
7        (6) having been convicted of a felony, unless the
8    individual demonstrates to the Director sufficient
9    rehabilitation to warrant the public trust; consideration
10    of such conviction of an applicant shall be in accordance
11    with Section 500-76;
12        (7) having admitted or been found to have committed
13    any insurance unfair trade practice or fraud;
14        (8) using fraudulent, coercive, or dishonest
15    practices, or demonstrating incompetence,
16    untrustworthiness or financial irresponsibility in the
17    conduct of business in this State or elsewhere;
18        (9) having an insurance producer license, or its
19    equivalent, denied, suspended, or revoked in any other
20    state, province, district or territory;
21        (10) forging a name to an application for insurance or
22    to a document related to an insurance transaction;
23        (11) improperly using notes or any other reference
24    material to complete an examination for an insurance
25    license;
26        (12) knowingly accepting insurance business from an

 

 

SB3675- 20 -LRB103 38256 RPS 68391 b

1    individual who is not licensed;
2        (13) failing to comply with an administrative or court
3    order imposing a child support obligation;
4        (14) failing to pay state income tax or penalty or
5    interest or comply with any administrative or court order
6    directing payment of state income tax or failed to file a
7    return or to pay any final assessment of any tax due to the
8    Department of Revenue;
9        (15) (blank); or
10        (16) failing to comply with any provision of the
11    Viatical Settlements Act of 2009; or .
12        (17) failing to make a disclosure or obtain a signed
13    confirmation required under Section 15 of the Short-Term,
14    Limited-Duration Health Insurance Coverage Act or any
15    unlawful practice described in Section 30 of the
16    Short-Term, Limited-Duration Health Insurance Coverage
17    Act.
18    (b) If the action by the Director is to nonrenew, suspend,
19or revoke a license or to deny an application for a license,
20the Director shall notify the applicant or licensee and
21advise, in writing, the applicant or licensee of the reason
22for the suspension, revocation, denial or nonrenewal of the
23applicant's or licensee's license. The applicant or licensee
24may make written demand upon the Director within 30 days after
25the date of mailing for a hearing before the Director to
26determine the reasonableness of the Director's action. The

 

 

SB3675- 21 -LRB103 38256 RPS 68391 b

1hearing must be held within not fewer than 20 days nor more
2than 30 days after the mailing of the notice of hearing and
3shall be held pursuant to 50 Ill. Adm. Code 2402.
4    (c) The license of a business entity may be suspended,
5revoked, or refused if the Director finds, after hearing, that
6an individual licensee's violation was known or should have
7been known by one or more of the partners, officers, or
8managers acting on behalf of the partnership, corporation,
9limited liability company, or limited liability partnership
10and the violation was neither reported to the Director nor
11corrective action taken.
12    (d) In addition to or instead of any applicable denial,
13suspension, or revocation of a license, a person may, after
14hearing, be subject to a civil penalty of up to $10,000 for
15each cause for denial, suspension, or revocation, however, the
16civil penalty may total no more than $100,000.
17    (e) The Director has the authority to enforce the
18provisions of and impose any penalty or remedy authorized by
19this Article against any person who is under investigation for
20or charged with a violation of this Code or rules even if the
21person's license or registration has been surrendered or has
22lapsed by operation of law.
23    (f) Upon the suspension, denial, or revocation of a
24license, the licensee or other person having possession or
25custody of the license shall promptly deliver it to the
26Director in person or by mail. The Director shall publish all

 

 

SB3675- 22 -LRB103 38256 RPS 68391 b

1suspensions, denials, or revocations after the suspensions,
2denials, or revocations become final in a manner designed to
3notify interested insurance companies and other persons.
4    (g) A person whose license is revoked or whose application
5is denied pursuant to this Section is ineligible to apply for
6any license for 3 years after the revocation or denial. A
7person whose license as an insurance producer has been
8revoked, suspended, or denied may not be employed, contracted,
9or engaged in any insurance related capacity during the time
10the revocation, suspension, or denial is in effect.
11(Source: P.A. 100-286, eff. 1-1-18; 100-872, eff. 8-14-18.)
 
12    Section 10. The Short-Term, Limited-Duration Health
13Insurance Coverage Act is amended by changing Sections 5, 10,
1415, and 20 and by adding Sections 2, 25, 30, and 35 as follows:
 
15    (215 ILCS 190/2 new)
16    Sec. 2. Purpose and scope. This Act is intended to
17regulate the sale, solicitation, and marketing of short-term,
18limited-duration health insurance coverage to insurance
19consumers, and the referral of insurance consumers to
20short-term, limited-duration health insurance coverage, and to
21protect consumers from confusing or deceptive marketing
22practices. This Act applies to health insurance issuers and
23insurance producers. Additionally, except as provided therein,
24Section 30 applies to any other person whose business

 

 

SB3675- 23 -LRB103 38256 RPS 68391 b

1transactions include advertising, referring, or directing
2prospective insurance purchasers or enrollees to health
3insurance coverage even when such persons are not otherwise
4required to obtain a license, certificate, or registration
5from the Department.
 
6    (215 ILCS 190/5)
7    Sec. 5. Definitions. In this Act:
8    "Department" means the Department of Insurance.
9    "Excepted benefits" has the meaning given to that term in
1042 U.S.C. 300gg-91(c) and regulations thereunder.
11    "Health insurance coverage" has the meaning given to that
12term in Section 5 of the Illinois Health Insurance Portability
13and Accountability Act.
14    "Health insurance issuer" has the meaning given to that
15term in Section 5 of the Illinois Health Insurance Portability
16and Accountability Act.
17    "Health insurance issuer doing direct sales" means a
18health insurance issuer that provides a means to accept a
19completed application or enrollment form for a policy or
20certificate of health insurance coverage directly from an
21individual or group without any prior live interaction or
22written correspondence between that individual or group and an
23insurance producer. A "health insurance issuer doing direct
24sales" includes a health insurance issuer that accepts an
25application for health insurance coverage through its own

 

 

SB3675- 24 -LRB103 38256 RPS 68391 b

1website. A "health insurance issuer doing direct sales" does
2not include the enrollment of individuals under a group policy
3by a non-producer representative of the group or the group's
4own website.
5    "Fraud" means an intentional misrepresentation of a
6material fact in connection with the coverage.
7    "Person" means any natural or legal person, organization,
8body, association, corporation, company, partnership, society,
9order, aggregation of individuals, or other entity described
10under any State or federal law.
11    "Short-term, limited-duration health insurance coverage"
12means health insurance coverage, other than excepted benefits,
13provided pursuant to a policy or certificate with an issuer,
14regardless of the situs of the delivery of the policy, that has
15an expiration date of is less than 365 days after the effective
16date of the policy or certificate.
17(Source: P.A. 100-1118, eff. 11-27-18.)
 
18    (215 ILCS 190/10)
19    Sec. 10. Application; scope; duration of coverage.
20    (a) This Act applies to health insurance issuers that
21offer short-term, limited-duration health insurance coverage
22to groups and individuals in this State and to short-term,
23limited-duration health insurance coverage that is delivered
24or issued for delivery in this State, including group coverage
25issued outside of this State that covers individuals in this

 

 

SB3675- 25 -LRB103 38256 RPS 68391 b

1State.
2    (b) A short-term, limited-duration health insurance
3coverage policy or certificate may not be issued or delivered
4to any natural or legal person residing in this State unless
5the policy or certificate, when delivered or issued for
6delivery in this State, complies with the provisions of this
7Act.
8    (b-5) In addition to the entities recognized under Section
9230.1 or 367 of the Illinois Insurance Code or under the Health
10Maintenance Organization Act as eligible for group coverage, a
11group policy of short-term, limited-duration health insurance
12coverage may be issued to an institution of higher education
13for the benefit of its enrolled students and their dependents
14for purposes of this Act.
15    (c) Any short-term, limited-duration health insurance
16coverage policy or certificate that is delivered or issued for
17delivery in this State must have an expiration date in the
18policy that is less than the lesser of 181 days after the
19effective date or any applicable time limitation provided in
20federal law or regulation and shall not be renewable or
21extendable within a period of 365 days after the individual's
22coverage under the policy ends, either at the option of the
23issuer or the individual. Renewal of a short-term,
24limited-duration health insurance coverage policy or
25certificate includes the issuance of a new or different
26short-term, limited-duration health insurance policy or

 

 

SB3675- 26 -LRB103 38256 RPS 68391 b

1certificate by an issuer to a policyholder within 60 days
2after the expiration of a policy or certificate previously
3issued by the issuer to the policyholder.
4    (d) An issuer may not rescind any Any short-term,
5limited-duration health insurance coverage policy or
6certificate that is delivered or issued for delivery in this
7State may not be rescinded before the expiration date in the
8policy, except as provided in Section 154 of the Illinois
9Insurance Code. An issuer may not cancel any such policy or
10certificate except for nonpayment of premiums or for fraud in
11the making of a claim or an application for the policy or
12certificate. Notwithstanding Section 357.22 of the Illinois
13Insurance Code, cancellations for nonpayment of premiums shall
14not be valid except upon 10 days' notice but may be effectuated
15retroactively back to the last date of coverage for which
16premiums were paid in cases of nonpayment of premiums, fraud,
17or as provided in subsection (e).
18    (e) Any short-term, limited-duration health insurance
19coverage policy or certificate that is delivered or issued for
20delivery in this State shall contain an option for an
21individual to cancel coverage after any 30-day interval during
22the term of the plan, counting such intervals from the
23effective date of coverage.
24(Source: P.A. 100-1118, eff. 11-27-18.)
 
25    (215 ILCS 190/15)

 

 

SB3675- 27 -LRB103 38256 RPS 68391 b

1    Sec. 15. Disclosure requirements.
2    (a) A health insurance issuer that offers short-term,
3limited-duration health insurance coverage to be delivered or
4issued for delivery in this State shall, in addition to all
5other documents required, including, but not limited to, the
6policy, the certificate, the membership booklet, the completed
7and signed application or enrollment form, all signed
8confirmations required by this Section, and a description of
9appeal and external review rights, deliver an outline of
10coverage to an applicant for or an enrollee in short-term,
11limited-duration health insurance coverage delivered or issued
12for delivery in this State.
13    (b) Any short-term, limited-duration health insurance
14coverage policy that is delivered or issued for delivery in
15the State shall display prominently in the policy, any
16application, sales, and marketing materials provided in
17connection with enrollment in such coverage, and the outline
18of coverage for such coverage, in at least 14-point, bold
19type, the following: "NOTICE: THE SHORT-TERM, LIMITED-DURATION
20INSURANCE BENEFITS UNDER THIS COVERAGE DO NOT MEET ALL FEDERAL
21REQUIREMENTS TO QUALIFY AS "MINIMUM ESSENTIAL COVERAGE" FOR
22HEALTH INSURANCE UNDER THE AFFORDABLE CARE ACT. THIS PLAN OF
23COVERAGE DOES NOT INCLUDE ALL ESSENTIAL HEALTH BENEFITS AS
24REQUIRED BY THE AFFORDABLE CARE ACT. PREEXISTING CONDITIONS
25ARE NOT COVERED UNDER THIS PLAN OF COVERAGE. BE SURE TO CHECK
26YOUR POLICY CAREFULLY TO MAKE SURE YOU UNDERSTAND WHAT THE

 

 

SB3675- 28 -LRB103 38256 RPS 68391 b

1POLICY DOES AND DOES NOT COVER. IF THIS COVERAGE EXPIRES OR YOU
2LOSE ELIGIBILITY FOR THIS COVERAGE, YOU MIGHT HAVE TO WAIT
3UNTIL THE NEXT OPEN ENROLLMENT PERIOD TO GET OTHER HEALTH
4INSURANCE COVERAGE. YOU MAY BE ABLE TO GET LONGER TERM
5INSURANCE THAT QUALIFIES AS "MINIMUM ESSENTIAL COVERAGE" FOR
6HEALTH INSURANCE UNDER THE AFFORDABLE CARE ACT NOW AND HELP TO
7PAY FOR IT AT WWW.HEALTHCARE.GOV.".
8    (c)(1) Before enrolling any individual or accepting any
9application for group or individual short-term,
10limited-duration health insurance coverage to be delivered or
11issued for delivery in this State, an insurance producer or a
12health insurance issuer doing direct sales shall provide a
13disclosure to the prospective purchaser or enrollee to reflect
14each essential health benefit in the State of Illinois,
15identify whether the policy or certificate covers that
16benefit, and obtain the prospective purchaser or enrollee's
17signed confirmation of receipt of this disclosure. The signed
18confirmation document must be in at least 12-point type and
19must include the complete list of essential health benefits
20and an indication for each benefit as to whether the policy or
21certificate covers it to the extent provided in the Illinois
22Essential Health Benefits Benchmark Plan. The confirmation
23document may be included within the application. An insurance
24producer or other representative of an issuer or its
25administrator may not sign on the prospective purchaser or
26enrollee's behalf.

 

 

SB3675- 29 -LRB103 38256 RPS 68391 b

1    (2) For coverage offered to an individual in this State
2under a group policy by a representative of the group
3policyholder or its administrator, if the issuer does not
4receive the signed confirmation within or with the
5individual's completed and signed application or enrollment
6form, the issuer must provide this disclosure to the
7individual and obtain the individual's signed confirmation
8before enrolling the individual under the coverage.
9    (d)(1) Before enrolling any individual or accepting any
10individual application for short-term, limited-duration health
11insurance coverage, an insurance producer or a health
12insurance issuer doing direct sales must provide a disclosure
13of the complete list of qualifying events for special
14enrollment with the prospective purchaser or enrollee, prompt
15the applicant or enrollee to identify any qualifying event for
16special enrollment that applies to the applicant or enrollee
17on the date the short-term, limited-duration health insurance
18coverage is submitted, and obtain the prospective purchaser or
19enrollee's signed confirmation as to whether the individual
20has experienced a qualifying event within the time frames
21provided under the Patient Protection and Affordable Care Act.
22The signed confirmation must be in at least 12-point type and
23must include the complete list of qualifying events, the
24relevant time frames for each, and an indication for each
25qualifying event as to whether it applies to the individual.
26This signed confirmation may be included within the

 

 

SB3675- 30 -LRB103 38256 RPS 68391 b

1application. An insurance producer or other representative of
2the issuer or its administrator may not sign the confirmation
3on the individual's behalf.
4    (2) If the individual qualifies for special enrollment, or
5during an open enrollment period described in 42 U.S.C.
6300gg-1, the issuer or producer, before accepting the
7application or enrollment, must inform the individual in
8writing or via face-to-face interaction, telephone call, or
9voicemail about the availability of qualified health plans on
10the healthcare.gov website. If the issuer or producer also
11offers policies in the individual market, the issuer or
12producer may also inform the individual of the availability of
13such plans.
14    (3) For coverage offered to an individual in this State
15under a group policy by a representative of the group
16policyholder or its administrator, if the issuer does not
17receive the signed confirmation regarding qualifying events
18within or with the individual's completed and signed
19application or enrollment form, the issuer must provide this
20disclosure to the individual and obtain the individual's
21signed confirmation regarding qualifying events before
22enrolling the individual under the coverage. If the individual
23indicates that a qualifying event has occurred within the
24relevant time frame, the issuer must comply with paragraph
25(2).
26    (e) A health insurance issuer shall provide a website

 

 

SB3675- 31 -LRB103 38256 RPS 68391 b

1where prospective purchasers or enrollees can review the
2sample policy or certificate and the outline of coverage
3before submitting their application or enrollment form. The
4availability of this website shall be disclosed on the
5application or enrollment form and in any sales or marketing
6materials for the coverage.
7    (f) The policy or certificate and any application or
8enrollment form must contain a provision stating that, during
9a period of 10 days from the date the policy or certificate is
10delivered, the group or individual may submit a written
11request for retroactive cancellation of coverage and that in
12such event the issuer will refund any premium paid for the
13policy or certificate, including any contract fees or other
14charges.
15    (g) In addition to the written disclosures, any insurance
16producer (c) Any individual selling a short-term,
17limited-duration health insurance coverage policy in this
18State in face-to-face or telephonic sales interactions must
19read out loud the disclosures disclosure in subsections
20subsection (b), (c), (d), (e), and (f) to a prospective
21purchaser or enrollee. An issuer entity selling a short-term,
22limited-duration health insurance coverage policy or
23certificate in Illinois must display the disclosures
24disclosure in subsections subsection (b), (c), (d), (e), and
25(f) on the webpage where a prospective purchaser or enrollee
26would purchase or enroll in coverage. For sales conducted by

 

 

SB3675- 32 -LRB103 38256 RPS 68391 b

1an insurance producer in face-to-face or telephonic
2interactions, the application or enrollment form shall contain
3an attestation to be initialed by the applicant that the
4producer read each disclosure out loud, that the applicant
5understood each disclosure, and that the applicant was given
6opportunities to ask the producer questions about each
7disclosure and to review the policy or certificate and the
8outline of coverage.
9    (h) (d) Nothing in this Section precludes an issuer
10insurer from providing disclosures in addition to those
11required in subsections (b), and (c), (d), (e), and (f).
12Nothing in this Section precludes an insurer from providing
13disclosures intended to clarify those required in subsections
14(b), and (c), (d), (e), and (f) if approved by the Department.
15Nothing in this Section precludes an issuer from including the
16written disclosures required in subsections (c) and (d) on the
17application or enrollment form.
18    (i) No policy or certificate of short-term,
19limited-duration health insurance coverage shall be delivered
20or issued for delivery in this State unless the prospective
21purchaser or enrollee reviews and signs the completed written
22application or enrollment form. Any application or enrollment
23form submitted by an insurance producer to a health insurance
24issuer shall contain an attestation clause signed by the
25producer stating that the producer received the signed form
26from the applicant, that no alterations have been made to any

 

 

SB3675- 33 -LRB103 38256 RPS 68391 b

1of the applicant's personal information appearing on the
2signed form at the time the producer received it, and that the
3applicant received and signed all disclosures described in
4this Section.
5    (j) Nothing in this Act shall preclude a prospective
6purchaser or enrollee from designating an authorized
7representative to act on his or her behalf in relation to the
8purchase or enrollment. However, no designation of an
9insurance producer, a health insurance issuer, or an agent or
10employee of either shall be valid with respect to the
11disclosures, applications, enrollment forms, and signed
12confirmations under this Section.
13(Source: P.A. 100-1118, eff. 11-27-18.)
 
14    (215 ILCS 190/20)
15    Sec. 20. Filing and approval.
16    (a) Coverage subject to this Act may not be delivered or
17issued for delivery in this State unless the health insurance
18issuer has complied with the policy form and rate filing
19requirements of Sections 143 and 355 of the Illinois Insurance
20Code or Sections 4-12 and 4-13 of the Health Maintenance
21Organization Act, as applicable, including the rules adopted
22thereunder policy evidencing such coverage has been filed with
23and been approved by the Department.
24    (b) A health insurance issuer that who intends to deliver
25or issue for delivery a short-term, limited-duration health

 

 

SB3675- 34 -LRB103 38256 RPS 68391 b

1insurance coverage policy or certificate in this State shall
2file with the Department: (1) all paperwork required for
3individual health insurance coverage pursuant to 50 Ill. Adm.
4Code 916; and (2) all sales and marketing materials provided
5in connection with enrollment in such coverage for
6informational purposes.
7    (c) (Blank). The Department shall adopt any rules
8necessary to carry out the provisions of this Act.
9(Source: P.A. 100-1118, eff. 11-27-18.)
 
10    (215 ILCS 190/25 new)
11    Sec. 25. Coverage requirements; other laws.
12    (a) Except where inconsistent with this Act, a health
13insurance issuer that offers any policy or certificate of
14short-term, limited-duration health insurance coverage shall
15be subject to all Illinois insurance laws or rules not
16specifically referenced in this Act that apply to major
17medical accident and health insurance or health maintenance
18organization health care plans, as applicable to the
19certificate of authority under which the short-term,
20limited-duration health insurance coverage is offered or
21issued, and that do not:
22        (1) require the policy or certificate to cover
23    essential health benefits or other specified health care
24    services or to maintain parity between certain types of
25    benefits;

 

 

SB3675- 35 -LRB103 38256 RPS 68391 b

1        (2) require the prohibition of underwriting;
2        (3) prescribe standards for continuation coverage or
3    conversion privileges;
4        (4) prohibit or prescribe standards for allowable
5    cost-sharing amounts; or
6        (5) require an issuer to satisfy standards for the
7    adequacy and transparency of any provider network through
8    which the insured or enrollee is required or incentivized
9    to obtain covered health care services.
10    (b) Notwithstanding subsection (a), no State law or rule
11shall apply to the extent that it would require a policy or
12certificate of short-term, limited-duration health insurance
13coverage to provide coverage for at least 3 calendar months or
14to renew, extend, or reinstate coverage within 365 days of the
15date that coverage terminates.
16    (c) Nothing in this Act shall exempt a health maintenance
17organization offering short-term, limited-duration health
18insurance coverage from the requirements for coverage of basic
19health care services or other requirements to maintain and
20restrictions on a certificate of authority under Sections 2-1
21through 2-3 of the Health Maintenance Organization Act.
 
22    (215 ILCS 190/30 new)
23    Sec. 30. Unfair or deceptive practices relating to the
24sale of supplemental or short-term, limited-duration health
25insurance coverage.

 

 

SB3675- 36 -LRB103 38256 RPS 68391 b

1    (a) It is an unlawful method, act, or practice within the
2meaning of this Act for any person who solicits, negotiates,
3sells, offers, offers to enroll, issues, or delivers
4short-term, limited-duration health insurance coverage or
5excepted benefits within this State, or advertisers for such
6persons, or persons whose business transactions include
7referring or directing prospective purchasers or enrollees of
8health insurance coverage that reside or are domiciled in this
9State to health insurance issuers or insurance producers
10transacting business in this State, to do any of the
11following:
12        (1) represent or warrant to any prospective purchaser
13    or enrollee, or use language or imagery in speech or
14    published content that is suggestive, that a policy or
15    certificate of excepted benefits or short-term,
16    limited-duration health insurance coverage, or any
17    combination of such policies or certificates, constitutes
18    minimum essential coverage;
19        (2) represent or warrant to any prospective purchaser
20    or enrollee, or use language or imagery in speech or
21    published content that is suggestive, that a policy or
22    certificate of excepted benefits or short-term,
23    limited-duration health insurance coverage, or any
24    combination of such policies or certificates, is similar
25    to, is almost as beneficial as, can be used for similar
26    purposes as, or may be better for the prospective

 

 

SB3675- 37 -LRB103 38256 RPS 68391 b

1    purchaser or enrollee than minimum essential coverage,
2    major medical coverage that complies with all Illinois
3    requirements, a health maintenance organization health
4    care plan that complies with all Illinois requirements, a
5    voluntary health services plan, comprehensive health
6    insurance coverage, a qualified health plan, or any other
7    description of coverage indicating such policies or
8    certificates; or
9        (3) use any logo, brand, trademark, service mark,
10    mark, device, name, tagline, slogan, descriptor, or
11    website domain that is deceptively similar to those used
12    for Get Covered Illinois or the healthcare.gov website,
13    including those that do not expressly mention Illinois or
14    its political subdivisions. This paragraph expressly
15    includes circumstances that would not violate the
16    Counterfeit Trademark Act.
17    (b) This Section does not apply to Internet search
18engines, Internet service providers, website domain
19registrars, Internet network hardware providers, or other
20natural or legal persons insofar as they do not propose,
21approve, or submit the content published by an insurance
22producer, health insurance issuer, or their advertisers, or
23propose, approve, or submit the content published by persons
24whose business transactions include referring prospective
25purchasers or enrollees resident or domiciled in this State to
26health insurance issuers or insurance producers transacting

 

 

SB3675- 38 -LRB103 38256 RPS 68391 b

1business in this State.
 
2    (215 ILCS 190/35 new)
3    Sec. 35. Department administration and enforcement. The
4Department may adopt any rules necessary to carry out the
5provisions of this Act. The Department shall have all
6enforcement powers granted to it by law with respect to
7accident and health insurance and health maintenance
8organization health care plans and all persons otherwise under
9the Director's jurisdiction.
 
10    Section 95. No acceleration or delay. Where this Act makes
11changes in a statute that is represented in this Act by text
12that is not yet or no longer in effect (for example, a Section
13represented by multiple versions), the use of that text does
14not accelerate or delay the taking effect of (i) the changes
15made by this Act or (ii) provisions derived from any other
16Public Act.
 
17    Section 99. Effective date. This Act takes effect January
181, 2026.

 

 

SB3675- 39 -LRB103 38256 RPS 68391 b

1 INDEX
2 Statutes amended in order of appearance
3    215 ILCS 5/121-2.05from Ch. 73, par. 733-2.05
4    215 ILCS 5/356z.18
5    215 ILCS 5/367.3from Ch. 73, par. 979.3
6    215 ILCS 5/367afrom Ch. 73, par. 979a
7    215 ILCS 5/368f
8    215 ILCS 5/424from Ch. 73, par. 1031
9    215 ILCS 5/425from Ch. 73, par. 1032
10    215 ILCS 5/500-70
11    215 ILCS 190/2 new
12    215 ILCS 190/5
13    215 ILCS 190/10
14    215 ILCS 190/15
15    215 ILCS 190/20
16    215 ILCS 190/25 new
17    215 ILCS 190/30 new
18    215 ILCS 190/35 new